Customer Experience is the Next Frontier
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Andrew Grant of MaritzCX London explains why customer experience (CX) is the next frontier for businesses. Today's customers expect more from brands. Andrew's data shows the link between customer satisfaction and repurchase activity. He covers a bit about what the future of CX management might look like including shorter surveys and the inclusion of non-research data to help brands get a fuller picture of each customer and act in real time.
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Customer Experience is the Next Frontier
- 1. Customer Experience: The Next Frontier
- 2. Its all about product…right? NO. The experience the company delivers is now the focal point in automotive.
- 3. 89% of companies plan to compete primarily on the basis of the customer experience by 2016 Source: Gartner
- 4. Despite continual heavy R&D investment… Product parity is increasingly the norm Features can be copied easily and quickly Which means that, as time goes by, there is no such thing as a ‘bad’ product Why is Customer Experience the differentiator?
- 5. In an industry where customers are increasingly conditioned to believe that disloyalty is the norm.. Customer experience and brand are inextricably linked “this is how I expect to be treated by a brand like yours” Why is Customer Experience the differentiator?
- 6. Great customer experience… does it really make a difference?
- 7. When the going gets tough – a lesson from history 0 2 4 6 8 10 12 14 16 91 to 100 81 to 90 71 to 80 61 to 70 51 to 60 41 to 50 31 to 40 21 to 30 11 to 20 0 to 10 %dealersgoingoutofbusiness2008 Satisfaction percentiles Dealers going out of business in the recessionby sat levels sales Service Bottom 10% 3X more likely to go out of business than top 10% in sales;1.5x in aftersales
- 8. Impact of satisfaction on repurchase Intuitively we believe that more satisfied customers are more likely to repurchase. This data is from the US NVCS dataset Dealer satisfaction level Satisfaction by level Completely satisfied 47% Very satisfied 23% Fairly satisfied 16% Dissatisfied 7% Very dissatisfied 6% 100%
- 9. Dealer satisfaction level Satisfaction by level Vehicles sold Completely satisfied 47% 343 Very satisfied 23% 169 Fairly satisfied 16% 119 Dissatisfied 7% 49 Very dissatisfied 6% 45 100% 726 Impact of satisfaction on repurchase Across the industry we can see the split of cars bought across the satisfaction bands
- 10. Dealer satisfaction level Satisfaction by level Vehicles sold % customers who bought next car at same dealer Completely satisfied 47% 343 52% Very satisfied 23% 169 41% Fairly satisfied 16% 119 25% Dissatisfied 7% 49 4% Very dissatisfied 6% 45 8% 100% 726 Impact of satisfaction on repurchase It gets interesting when we look at whether people came back to buy another car, again broken down by their satisfaction levels
- 11. Dealer satisfaction level Satisfaction by level Vehicles sold % customers who bought next car at same dealer Cars sold based on loyalty projections Completely satisfied 47% 343 52% 179 Very satisfied 23% 169 41% 69 Fairly satisfied 16% 119 25% 30 Dissatisfied 7% 49 4% 2 Very dissatisfied 6% 45 8% 4 100% 726 283 Impact of satisfaction on repurchase So across the industry, around 40% repurchase, heavily skewed towards the most satisfied customers
- 12. What happens if we move customers up one level on dealer satisfaction? This is the same data for satisfaction from previous charts Dealer satisfaction level Satisfaction by level Completely satisfied 47% Very satisfied 23% Fairly satisfied 16% Dissatisfied 7% Very dissatisfied 6% 100%
- 13. What happens if we move customers up one level on dealer satisfaction? All we are doing is assuming that each owner moves up one satisfaction band: very satisfied owners become completely satisfied etc Dealer satisfaction level Satisfaction by level Satisfaction by level Completely satisfied 47% 71% Very satisfied 23% 16% Fairly satisfied 16% 7% Dissatisfied 7% 6% Very dissatisfied 6% 0% 100% 100%
- 14. What happens if we move customers up one level on dealer satisfaction? The number of cars sold in each satisfaction band is the same as we saw on previous charts Dealer satisfaction level Satisfaction by level Satisfaction by level Vehicles sold Completely satisfied 47% 71% 343 Very satisfied 23% 16% 169 Fairly satisfied 16% 7% 119 Dissatisfied 7% 6% 49 Very dissatisfied 6% 0% 45 100% 100% 726
- 15. What happens if we move customers up one level on dealer satisfaction? As is the proportion repurchasing in each band. All that has changed is the level of satisfaction scored Dealer satisfaction level Satisfaction by level Satisfaction by level Vehicles sold % customers who bought next car at same dealer Completely satisfied 47% 71% 343 52% Very satisfied 23% 16% 169 41% Fairly satisfied 16% 7% 119 25% Dissatisfied 7% 6% 49 4% Very dissatisfied 6% 0% 45 8% 100% 100% 726
- 16. What happens if we move customers up one level on dealer satisfaction? Dealer satisfaction level Satisfaction by level Satisfaction by level Vehicles sold % customers who bought next car at same dealer Cars sold based on loyalty projections Completely satisfied 47% 71% 343 52% 266 Very satisfied 23% 16% 169 41% 49 Fairly satisfied 16% 7% 119 25% 12 Dissatisfied 7% 6% 49 4% 2 Very dissatisfied 6% 0% 45 8% 0 100% 100% 726 329 Because completely satisfied owners are more likely to come back, the impact on repurchase loyalty is huge
- 17. Additional units sold * profit per unit = sales uplift + Additional units sold * service profit per unit = service uplift Last time we ran this study in 2012, this amounted to $106,315 additional profit per dealer per year Doing the maths
- 18. 1050 1100 1150 1200 1250 1300 1350 0 10 20 30 40 50 60 70 80 90 100 Bottom 20% Top 20% Impact of NPS on GP per vehicle - sales NPS GP European data point the same way 0 200 400 600 800 1000 1200 0 10 20 30 40 50 60 70 80 90 Bottom 20% Top 20% Impact of NPS on GP per vehicle - service NPS GP
- 19. What does the future look like?
- 20. A disconnect in what we do today? Customer wants this We tend to do this
- 21. So if customer experience is the next battleground what might it look like? Customer CX Manager/Provider On my terms In my voice Relationship, not surveys What’s in it for me? Omni channel Text Driven 4 questions not 44 Breaking the MRS taboo’s?
- 22. • Of course CATI, SMS, mobile, tablet, PC, even postal • Outbound and inbound • Social media integrated But also… • Location triggered interaction when leaving the dealership? • Using the in car technology and your intimate knowledge of the customer Omni channel
- 23. • Driving characteristics • Where driven • How driven • Regular routes taken • Used at weekends? • Used for vacations? • etc The opportunities for Big Data and individualised customer engagement are enormous As OEMs you have (the potential) to know
- 24. Real-time customer engagement Opportunity to use in car technology
- 25. • Increasingly it is all about MY story • Text analyticsis already becoming a key driver for understanding both survey and social data • Machine coding accuracy now approaching human coding Text driven
- 27. 4 questions not 44 Make the survey shorter!
- 28. • Don’t ask things you (should) already know • Don’t ask about your internal processes – use mystery shopping or internal audits for that • Don’t try to cover everything in one go • Do ask relationship questions – emotions are at least 3x better determinant of loyalty • Do put open questions front and centre 4 questions not 44
- 29. Nearly 80% of Customers Will Provide Personal Information to a “Trusted Brand” Many of us will trade… Source: SDL Data and Privacy Study 2014
- 30. What if this is what the customer wants? Customers want a relationship with the brand. We should not go dark but provide engagement throughout the ownership lifecycle – sharing and receiving data
- 31. • A non-research purpose is when data is collected for reasons other than to enhance understanding in a robust way • Generally non-research exercises have one or more of the following characteristics: – If the data is collected on an identifiable basis, direct action will, or may, be taken. – The exercise promotes the aims or ideals of a client or organisation – The exercise promotes the products or services of a client or organisation. • Source: MRS Regulations for Using Research Techniques for Non- Research Purposes, 2010 The MRS guidelines actively disallow this type of customer engagement
- 32. • A 2-way relationship with the Brand where research, CRM and “something for something” brings them a genuinely enhanced experience? • Where we operate with ethics and governance in place, but without the firm delineation of research and “other” What if that is exactly what customers want?
- 33. In Summary
- 34. • CX is the next frontier. • CX does drive business outcomes including loyalty. • The world of customer feedback and expectations has changed more in the last 3 years than previous 30. • The changing consumer wants something that traditional CX research potentially stands in the way of. • Perhaps its time to rethink and reinvent how we as an industry engage with this changing customer world? Loyalty and CX are changing
- 35. Thank You! For more interesting ideas about CX, please visit, CX Café. cxcafe.maritzcx.com